Required information SB Exercise 7-16 through Exercise 7-17 (Algo) [The following information applies to the questions displayed below.) Raner. Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Office Total Company Sales Chicago Minneapolis $ 489,000 100% $ 169,500 1089 $ 319,500 1089 Variable expenses 244,500 50% 50,850 384 Contribution margin 191,700 609 244,500 50% 118,650 704 127,800 489 Traceable fixed expenses 136,920 28% 88,140 524 51,120 16% Office segment margin 107,580 22 $ 30,510 189 $ 76,680 249 Common fixed expenses not traceable to offices 68,460 145 Net operating income $ 39,120 B4 Exercise 7-17 (Algo) Working with a Segmented Income Statement (L07-4) Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Minneapolis $ 319,500 100% 191,700 609 127,800 404 51, 120 76,680 249 15,000 5 Market Medical Dental $ 226,000 100% $ 126,000 100% 144,640 645 65,520 524 81,360 361 60,480 489 13,560 64 26,460 215 $ 67,800 305 $ 34,020 27 169 SA Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income 409 Market Medical Dental $ 226,000 100% $ 126,000 100% 144,640 644 65.520 52% 81, 360 36% 60,480 489 13,560 64 26,460 214 $ 67,800 384 $ 34,020 274 Minneapolis $ 319,500 100% 191,700 604 127,800 51,120 16% 76,680 24% 15,000 5* $ 61,680 19 The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost $11,500. Marketing studies indicate that such a campaign would increase sales in the Medical market by $53,000 or increase sales in the Dental market by $54,500 Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? 3. In which of the markets would you recommend that the company focus its advertiing campaign? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's profits by $ 2 1 Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Minneapolis $ 319,500 100% 191,700 60% 127,800 40% 51,120 16% 76,680 24% 15,000 5% $ 61,680 19% The company would like to initiate an intensive advertising campaign in one of the two mar campaign would cost $11,500. Marketing studies indicate that such a campaign would incre $53,000 or increase sales in the Dental market by $54,500. Required: 1. How much would the company's profits increase (decrease) if it implemented the advertis 2. How much would the company's profits increase (decrease) if it implemented the advertis 3. In which of the markets would you recommend that the company focus its advertising car Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much would the company's profits increase (decrease) if it implemented the advertising ca Company's profits by Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Minneapolis $ 319,500 100% 191,700 60% 127,800 40% 51,120 16% 76,680 24% 15,000 5% $ 61,680 19% Medic $ 226,000 144,640 81, 360 13,560 $ 67,800 The company would like to initiate an intensive advertising campaign in one of the two market seg campaign would cost $11,500. Marketing studies indicate that such a campaign would increase sale $53,000 or increase sales in the Dental market by $54,500. Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising cam 2. How much would the company's profits increase (decrease) if it implemented the advertising car 3. In which of the markets would you recommend that the company focus its advertising campaign Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 In which of the markets would you recommend that the company focus its advertising campaign? Medical O Dental